The majority of non-profit organizations are governed and lead by a board of volunteer leaders. While their names may differ by organization—board of directors, governors, trustees, etc.—they all share the common responsibility for the achievement of the purpose and mission of their respective organization. Thus, ensuring that the organization has a clear and achievable strategy is one of the most important functions and the ultimate measure of the effective use of organizational resources. Yet, many boards remain mired in familiar challenges.
These familiar challenges include:
· Time (most boards are limited to a set number of scheduled meetings each year);
· Focus on routine annual matters (receiving committee reports and minutes);
· Lack of first-hand experience and knowledge with the overall organization (individual board members tend to have specialized interests and spend their time in these occupational niches);
· Limited time of board service (board members tend to serve a relatively short period)
The challenge for most non-profit organizations is that they are often impacted by unpredictable economic volatility, which is less calendar driven and more a situation requiring frequent and regular interaction of a broader group of organization executives. To be effective, boards must with work with staff in this environment, in a respectful and effective team setting, ensuring that strategy and operations are clearly linked and effectively implemented.
According to researchers Chinta Bhagat, Martin HIrt and Conor Kehoe, writing in “Tapping the Strategic Potential of Boards”, in a recent McKinsey Quarterly issue, there are three simple questions that board members and executives may ask themselves as they approach the development of strategy together:
· Does the board understand their industry’s/profession’s dynamics well enough: boards need time each year to more fully understand the structure and economics of the organization, as well as the ways in which the organization creates value
· Has there been enough board-staff debate before a strategy is discussed: board members should approach these discussions with an “owner’s mind-set”, with the goal of helping staff to broaden thinking by considering new, even unexpected, perspectives. Staff’s role is to introduce key pieces of content—details of competitors, key external trends likely to affect the organization, specific strengths the organization can use for growth, etc. The goal of the discussion is to develop a stronger, shared understanding of the skills and resources the organization has for producing strong performance, rather than merely moving with the tide.
· Have the board and management discussed all strategic options and wrestled them to the ground: Staff should formulate a robust set of strategic options, with an end state for each. These can then be brought to the board for discussion and decision-making.
Having meaningful, high-quality conservations like these is a challenge, particularly if boards aren’t used to having them. Success is often linked to the board chair’s ability to lead and facilitate discussion. The goal should be for a participative, collaborative environment while maintaining a healthy energy, in which all can speak their thoughts without “score keeping”. And the chair must neither monopolize the discussion nor fail to intervene strongly to redirect unproductive tangents.
Board-staff involvement and discussions introduces new voices and expertise to the debate and puts pressure on boards and staff alike to find the best answers, and how they can be implemented and measured. Yet, when done well, this type of discussion and strategy is invaluable. For the full member article, go to https://www.mckinseyquarterly.com/Governance/Boards/Tapping_the_strategic_potential_of_boards_3060
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